As of the third quarter of 2023, many tourist destinations in several countries have entirely or almost wholly relaxed their entry requirements. Hence, travel has been on the rise lately post-pandemic.
Unfortunately, high demand and skyrocketing inflation have combined, making going on trips costlier than it used to be. The good news is that there are ways to overcome these worrying variables. Here are five financial to-dos to future-proof your next international trip:
Build or Improve Credit Score
Having good credit can do wonders for your overall travel experience. It gives you better approval chances for credit and travel loans. Not only that, a good FICO score of 700 or higher translates to lower interest rates and more flexible repayment terms as well.
Besides financing, a good credit score ensures smoother international travel. It helps you get faster approval for anything you must apply abroad. These include travel packages, rental vehicles, or even long-term accommodations for extended trips.
A good credit score also gives you access to travel rewards and benefits. These include discounts on flights and accommodations, exclusive lounges, and elite upgrades. They can be a game-changer not only in the cost but also in the comfort of your travel.
Another access a good credit score can give is travel insurance plans. In general, the higher your credit score, the more comprehensive travel insurance coverage can offer. With good credit, expect to have almost all your unexpected costs during your trip covered.
Get Travel Insurance
Life insurance isn’t the same as travel insurance. The former covers you at your demise, which typically includes a death benefit and a cash value component. Conversely, the latter covers you when you’re traveling.
Depending on the policy, the primary coverages of travel insurance include :
- medical coverage
- trip interruption or cancellation coverage
- baggage and personal effects coverage
- rental property and rental car coverage
- accidental death coverage
As noticed, it’s possible to have life insurance in travel insurance. However, more often than not, travel insurance primarily covers 24/7 emergency services, such as rebooking canceled flights, replacing lost passports, medical expenses, and cash wire assistance.
Other life insurance policies can also automatically cover international travel. Some insurers offer travel coverage riders, which often makes premiums higher. Use a calculator for term life insurance to know how much the increase is, or better, reach out to your provider for this.
Opt for Travel-Friendly Credit Cards
Using credit cards can significantly simplify overseas travel since they’re widely accepted around the world. As long as it’s a travel-friendly credit card, there’s no need to deal with currency conversion and pay unnecessary foreign transaction fees.
However, note that credit card transaction fees are more expensive than debit cards. There are also instances when local shops and banks charge other fees for your credit card payments, such as conversion fees. Be sure to inquire with the staff if no fee notices were displayed to prevent ghost charges.
Debit cards, in contrast, are still subject to temporary holds, especially when local merchants want to verify your bank account’s validity. While they may be cheaper than credit cards, they still circumvent certain fees, especially if you opt to pay in the local currency.
Moreover, credit cards come with a lot of travel perks that debit cards don’t have. Each spending needs to earn miles or points that can be redeemed for your travel expenses. Depending on the card issuer, these purchases can also automatically qualify for insurance that covers consumer goods, lost luggage or documents, and travel delays.
Stash Emergency Cash
In addition to credit cards, it’s highly recommended to have emergency funds. Experts recommend carrying two credit cards and $80-$100 cash at all times for unplanned expenses, such as transportation and accommodation costs.
Hiding $100 in your luggage or higher if you go somewhere less developed is advised. Doing so financially helps you a lot if you ever lose your wallet. Although USD is king almost anywhere, converting these funds to the local currency beforehand is better.
If you can pay in local currency or USD, break the emergency stash down into smaller denominations, then have half of them exchanged. If you go to remote areas, exchange all your funds in advance since you’ll likely have limited currency exchange options.
Inform your Banks
Before traveling, it’s important to email your banks about your trip. Inform them of your travel plans, including your destination and length of stay. This shouldn’t be overlooked. Otherwise, your bank will likely flag your international transactions as suspicious and hold your card.
Planning for vacation doesn’t only involve preparing the clothes you’re going to wear or the itinerary you’ve written down. You must also carefully consider the cost that comes with it. Financial preparedness before and during a trip is critical. Ensure you manage funds well to avoid flying through your savings and getting overwhelmed with travel debt by the end of your trip.